BSH: The Slow Transition

When Trillion Trophy Asia owner Paul Suen Cho-hung finally took control of Birmingham Sports Holdings in October 2016, he committed to not selling his stake in the holding company for a two-year period. With that period elapsing in less than six months, what does the future hold for BSH?

Suen’s modus operandi has always been to take on distressed stocks, fix them up and sell them on. It’s long been my belief that BSH was no different – and that the investment in the company and the club by outside companies was proof that the next lot of owners were slowly being introduced to the company.

Furthermore, we’ve seen a diversification of projects within the group with the investment in an office/residental building project in Cambodia. That investment ensured that BSH’s means of revenue were no longer solely decided by the football club and should ensure that the Stock Exchange of Hong Kong are satisfied with the value of the company going forwards.

However, I’m beginning to wonder if we will see the transition I’d expected as soon as October.

There have been no further announcements with respect to the investment in Cambodia to the Stock Exchange.

I’m not sure if any should have been expected, but given the huge losses reported in the interim report at the end of February I’m surprised nothing has been given out to pacify worried investors.

Shares in BSH are trading at the lowest point they have done for a year, and are down around 20% in value since the interim report was released on February, although they rallied briefly after Birmingham City confirmed their safety from relegation.

Why is it a problem if Paul Suen has to stick around for longer?

I can only give my hypothesis on this, with the caveat that I’m not a stockbroker or an accountant.

My feeling is that the longer the “transition” is delayed, the tighter Blues are going to have to be financially.

Furthermore, Suen has been busy investing money into other listed companies on the stock exchange as he continues his normal MO.

My gut instinct is that Suen does not want to put any more money into BSH as he wants to move it on – but something is holding that up.

I also think it’s possible until that hold up is sorted, whoever the new owners are – and I have my suspicions on that front – don’t want to put any more money into it themselves because it’s possible that the whole transition will fail.

I mentioned in my transfer newsletter on Monday that it’s my understanding that Blues have to generate funds to spend them in the transfer market. I’m going to admit, I’m not convinced that is solely for FFP reasons.

Before anyone thinks that this is me doom-mongering, I’m going to keep repeating what I’ve been saying for a while.

If the club are run on a tighter financial keel and with more prudence than they were last summer, then this is a good thing. While having a sugar daddy owner is fun, it’s only fun while the money lasts – as we saw under Carson Yeung.

I might be Buzz Killington right here – but I’d take a season of slow progress over another crazy campaign like last year.